Investment Q&A

Q: I’d like to dip my toe into doing a bit of technical trading. Are there signals that you prefer to use, and is there a specific kind of security (maybe an example) that this type of trading might work better on? Also, would this work for ETFs? I’ve been watching VGG using the MACD but I don’t think it’s a good candidate since it tends to trade in a narrow band and the signal seems to be too late getting in and out.

Thanks.

Q: Morning team,

I've recently taken some profits and have some cash to deploy for long term holds. And I would be interested to know what your top investment "themes" would be for the next 5+ years are? For instance, ideas that come to mind for me are Cloud computing, "green" investment, and cyber security. Are there others that you find more intriguing? And which companies/ETFs would you recommend as investments?

Thank you again for you insights!

Q: From what I am reading the federal government is going to go significantly increase spending in the next budget [latest number I am seeing is $100 billion]. This will take Canada's debt well over $1T, probably a further downgrade in Canada's debt rating from the current AA. As a retired person would I be correct in thinking a larger part of one's portfolio should be shifted to basic materials including precious metals, to foreign and US bonds and to a healthy cash balance in foreign currencies such as the USD, GBP and EUR?
As you are aware inflation is a killer for people living mainly on pension income so I'm trying to look forward and take action in small steps over time.
Thanks.

Q: I am wondering where you see the Canadian dollar headed in the near term and early 2021. If I am interested in purchasing US equities do you think I should convert now or wait for our dollar to go higher. Since I am also anticipating volatility in the next few months I don't want to miss my chance at converting and acquiring US equities. Thank you!

Q: hi 5i,
Would you please comment on this article;
David Rosenberg: No matter how you slice it, markets are in a bubble of historic proportions; And the higher they are, the harder they fall.
https://financialpost.com/investing/investing-pro/david-rosenberg-no-matter-how-you-slice-it-markets-are-in-a-bubble-of-historic-proportions/wcm/ccfab059-78b1-480e-8b01-b3ae4cefe8d0/

thanks

Q: How worried should we be?
The current government seems determined to bankrupt Canada
The latest headlines:
Parliamentary Budget Officer States, "The federal government has no more than one or two years to rein in the hundreds of billions of dollars in deficits it is wracking up through coronavirus spending, or risk the debt being “unsustainable.”
- And there have been recent reports of plans to increase spending, with CBC News citing one Liberal insider as saying the government plans on spending “on a scale we haven’t seen before.”
- Trudeau plans to roll out an “ambitious green agenda”. He said the country needs to focus on a green economic recovery to climb out from the effects of the COVID-19 pandemic.
- Trudeau has also touted the need for expanded employment supports, including new child care and social spending.

This is very disturbing and seems to confirm a government that is completely out of touch with reality and economics, and leading Canada down a path of debt that our grandchildren will be paying for.

What are you thoughts? How badly could this play out? How concerned should we be?

Q: You proposed that Warren Buffet's investment in five Japanese commodities traders is motivated by their commodities exposure, rather than by growth and/or multiple expansion prospects for Japan as a region. Okay, but suppose we ignore Buffet's specific interest; is it plausible that Japan's markets have priced-in its disadvantages (such as age-related lower productivity) to the degree that its country-specific ETFs (for example, BBJP) are now 'interesting'? Or should the apparent permanence of such structural constraints drive us away, indefinitely?

Q: Hello 5I
In your opinion, if one is negative or expecting volatility in the market short term, and you want to insulate yourself from this possibility, what needs to happen in a portfolio? Do nothing as this might be emotional and historically a bad move, invest in an inverse ETF, Move a little more towards Gold, consumer staple or low beta stocks? What type of news would make you personally shift focus? Of course, I am asking for your opinion but is there any proof for the answer? Thank you

Q: Hello 5i team,
Let’s say the S&P500 decreases by -15% from its high earlier this week over the next few days or weeks for no specific reason other than stretch valuations, COVID, elections and fiscale stimulus uncertainties. By how much would you expect each of the following stocks (DND, DCBO, LSPD, REAL, DSG, WELL, XBC, VEEV, BYD) to go down (a guesstimate for each)? Among other of your favorites, what other stocks could see an even worst correction?
Thank you for your collaboration, Eric

Q: What do you think of Innovation as a new sector? Here is a quote from a white paper published by Ark Funds:

"Based on our analysis presented in this paper, we believe innovation should be considered as a strategic allocation, if not a sub-asset class, in global public equity portfolios, much as emerging markets have evolved during the last 40 years. In our ever-changing world, as industries are disintermediated or displaced, and lifespans of companies shorten, investors should capitalize on alternative sources of growth by rethinking traditional asset allocation. Specifically, we think investors should ask themselves whether they sufficiently have incorporated disruptive innovation into their portfolio construction." From https://arkinv.st/3lJMsrl

Q: Hi,
How are the very large gov't deficits ($3T + US / $300B + CDA) being financed at such low interest rates. I understand the FEDs are buying a fair share but how can this be sustainable long term? How can private investors accept long term rates lower than inflation? I know this coul fill a book. Your general comments are appreciated. Thank you!

Q: Good day team,

I'd like for you guys to put on your Nostradamus hats and describe to me what you feel/predict will be the major investment trends over the next 10 years. Do you foresee any major paradigm shifts taking place that folks can really capitalize on? This is all assuming you have a crystal ball ;)

Q: Thoughts on the market that seems to defy gravity? I have to admit I’ve been tempted to sell many times since the rally started and I would have been wrong every time. Would you suggest keep holding?

Q: This is just a big thank you to 5iResearch. I thought I had a nice basket of solid stocks with many dividend payers, including a whole bunch recommended by 5iResearch. My stock portfolio was down 40% in the COVID-19 world and because I'm nearing retirement, I was getting worried and thinking about selling so that I'd least have the 60% left and maybe put it into GICs and try to live off that. But, your team kept advising me and others to hang on, suggesting that selling at that point was the wrong thing to do. I held on. I'm now back up to 100% and more. Thank you!

Q: If one anticipates a significant pick up in inflation due to all the extra costs related to Covid-19, what are the sectors likely to benefit? Could you give 3-4 suggestions for Can and US companies which would be expected to do well in that scenario? Thank you for your great insights?

Q: Hello, inflation has been in the spotlight lately.
1) What kind of stocks would ward off inflation?
2) Are metal stocks good for fighting inflation, and which stocks
would you recommend?
3) What kind of stocks would suffer the most from inflation?

Thanks

Q: I am trying to find the average returns of the TSX, and the TSX 60 (XIU?), for the last 5, 10 and 20 years - including and excluding dividends. Am I right to use the XIU for the TSX 60, or is there something better? Could you please complete the missing 'including dividend' and let me know where I could find that in the future? Thank you very much.
TSX:
5 year: 5.21% (excluding dividends). 5 year: _____ (including dividends??)
10 year: 4.4% (excluding div.). 10 year: _____ (including div.?)
20 year: 6.1% (excluding div.) 20 year: _____ (including div.?)

TSX60 (XIU ETF):
5 year: 0.094% (excluding div.) 5 year: _____ (including dividends??)
10 year: 4.54% (excluding div.) 10 year: _____ (including div.?)
20 year: 2.38% (excluding div.) 20 year: _____ (including div.?)

Q: Hi, are you willing to comment on a macro issue of the economy? I am perplexed by the housing market where volume of sales and prices seem to be hitting highs in some Canadian urban centers (not Alberta). Lumber companies are doing well. The long term Covid impact on the economy and jobs seems murky at best. Why is there so much confidence in the Canadian housing market? Due to historically low interest rates and some pent up demand? Federal policies designed to prop up the economy? I keep thinking this is all going to end badly if the jobs aren’t there to pay those mortgages. Appreciate your service. You may post this question publicly if you feel it’s Of general interest.

Q: I have been following a gradual dollar-cost averaging type approach to adding cash into the markets over the past several months.
With the US presidential election coming in the fall and a possibility of substantial political volatility there, would you advise deviating from this general approach? ie, is there a substantial chance of this event causing a market drop, that would merit changing a market approach?
Are there specific events that you are watching for that may act as triggers for coming market movements? The one that is holding my attention is Trump's overtures that he may not cede power if he loses, or if the election decision is unclear.

Thanks for your valued input,

Peter

Q: Hello,

I know they don't ring a bell at the bottom (or the top), but I am wondering whether any of the airlines, hotels, cruise lines or restaurants seem compelling right here. Not really the restaurants that are Covid beneficiaries like the pizza joints or Chipotle, more than the ones that have yet to recover. I am very concerned that with more gov't money being plowed into these industries the pre-restructuring shareholders would be wiped out. Thanks.